Lifting the lid off the Ahwaz oil and gas industry – and the price the Ahwazis pay for it

oil-ahwaz

Ahwaz is a region very rich in oil and gas resources and could, as a result, be termed an energy superpower. However, as long as geopolitical ambitions related to natural resources play a key role in the creation and deconstruction of countries, such an abundance can become a curse rather than a blessing.

Located on the eastern side of the Arabian Gulf, Ahwaz is home to the most important and sensitive spot in the world that is called the heartland. Current reports state that the proven oil reserves of the Ahwaz region, at 157 billion barrels, are the world’s third largest, while its gas reserves are the largest.  Taken together, the country owns the biggest hydrocarbon reserves in the world.
Reports also estimate that Iran currently produces about four million barrels per day of crude oil, of which some 1.5 million are used for the domestic market. What follows in this article is to demonstrate the scale of the output and revenue that the Iranian regime has been receiving from the Ahwaz oil and gas industry for a great number of years, with nothing but negative benefit to the people, or the environment

The history of the Ahwaz oil industry began in 1901 when a British speculator, William D’arcy was granted a concession from Ahwaz to explore and develop Ahwaz’s oil resources. The discovery of the first commercially significant oil in the Middle East in Ahwaz in 1908 led to an agreement made between Britain and Al-Ahwaz (Arabistan) with the Khazal Sheikh of the region.

However, in 1925, when Reza Pahlavi became Shah, the Persian state captured the Ahwazi authority and took over the energy resources, using them for their own benefit. The Ahwaz Oil and Gas companies are now completely owned by the Iranian regime. the holdings making up 10%  of the world’s proven oil reserves and 15% of its gas.

In 2004, Ahwaz resources produced 3.9 million barrels of oil per day (5.1% of the world’s total), which generated revenues of more than US$25 billion.

At 2006 levels of production, the Iranian regime proceeds from Ahwaz resources represented about 18.7% of Gross Domestic Product (GDP). (1)

 For 2009, the Ahwazi oil and gas sector accounted for 60% of the regime’s total revenue and 80% of the total value earnings. By 2012, the Iranian regime exported around 1.5 million barrels of Ahwaz oil a day,  the second largest exporter  of the Organisation of Petroleum Exporting  Countries (OPEC). (2)

Looking at the potential, in 2005 Ahwaz Oil had the capacity to produce 720,000 cubic meters per day (m3/d). It was believed that production capacity could increase to around 790,000 m3/d to 1,100,000 m3/d, but only with a substantial increase in foreign investment. (3)

By 2008 Iran actually produced 3.9-million-barrels, 620,000 m3/d and exported 380,000 m3/d from Ahwaz oil .(4)   Accounting for 5 percent of world production, it returned to its previous position as OPEC’s second-largest producer.(5)

In 2010, Iran’s long-term sustainable oil production rate was estimated at 600,000 m3/d. (6)

The Ahwazi producing Oil Companies, through their subsidiaries, produce crude oil, gas, and liquefied gases. The companies also provide, overhaul and maintain the installations, equipment, and machinery of the gas turbines used in the petroleum industry.

There are five major Oil-Producing Companies in Ahwaz.  These are:

 Karoun Oil & Gas Company

Based in Ahwaz, the Karoun Oil & Gas Producing Company is in charge of the management and production of oil, gas and liquefied gases from the fields located within the Ahwaz District.  The total crude production of this Company averages 1,042,000 barrels a day.  It supplies over 500,000 barrels of crude per day to Abadan in Ahwaz, Tehran, and Tabriz refineries.  Furthermore, the daily production of 50,000 barrels of Natural Gas Liquids (NGL) has turned Karoun into a major supplier of the Khor Musa (Bandar Imam) Petrochemical complex. (7)

Maroun Oil & Gas Company

The Maroun Oil and Gas Producing Company operates and produces crude oil and gas from the fields in the west bank of the Maroun (jarahi) River, which includes the fields of Maroun, Koupal, and Falahiyeh (Shadegan).  The Company’s output amounts to 620,000 barrels a day, part of which is sent to the Esfahan Refinery and the rest to the Khark Export Terminal.  (8)

Gachsaran Oil & Gas Company

 The Gachsaran Oil and Gas Producing Company manages the operation of a number of  dispersed fields, including Gachsaran, BibiHakimeh, Siahmakan, Rag-Sefid, Pazanan, Mansoorabad and Nargesi, most of which are in Ahwaz cities.  This company produces over 750,000 barrels of crude, 1,470,000,000 cubic feet of gas and 60,000 barrels of liquefied gas of Naphtha.

 Aghajari Oil & Gas Company

Based in Omidiyeh, the Aghajari Oil and Gas Producing Company produces crude and gas from the 7 fields of Aghajari, Karanj, Parsi, Khalafiyeh(Ramshir) , Pazanan, Rag-Sefid and a section of the Maroun Field located in the waist of Ahwaz.  The Company’s daily production amounts to over 730,000 barrels of light and heavy crude, a portion of which is directed to Esfahan Refinery, while the rest goes to the Khark oil export terminal. This Company also produces approximately 785 million cubic feet of dry gas, 30,000 barrels of liquefied gas and 7,000 barrels of Naphtha each day.  The major part of them gas produced is injected into reservoirs; the liquefied gas is directed to the Khor Musa (Bandar Imam) Petrochemical Complex, while the produced Naphtha is sent to the Bouali Petrochemical complex.

 Masjed-Soleyman Oil & Gas Company

Masjid-Soleyman has acted as the gateway for international oil concerns in the Middle East.  By annexing the oil fields of Lab Sefid, Galenar, Haftkel and Naft sefid, the subsidiary Company was set up to operate the oil and gas fields of the southern oil-rich zones, located to the North of Ahwaz.  With an allowed daily production of 120,000 barrels, the Company is in Naft Sefid, HafKel, Qale-Nar, Kaboud and Lab Sefid.   The company produces 195 million cubic feet of acid gas from the Jurassic reserves to send to the Razi Petrochemical Complex after dehumidification.  In addition, 17.3 million cubic feet of associated gas and 20 million cubic feet of gas are produced respectively from the Zilayee and Bangestan Reserves of Lab Sefid which is located in the company’s scope of activities. (9)

The Ahwazi Gas Capability

In addition to the natural gas associated with oil exploration and extraction, an estimated 62 percent of Iran’s 32.3 trillion cubic meters of proven natural gas reserves in 2006 were located in independent natural gas fields in ‘’Ahwaz land’’. The Ahwaz gas resources placed Iran second only to Russia in gas production capacity.  In 2006 annual production reached 105 billion cubic meters, with the fastest growth occurring over the previous 15 years. In 2011 it was predicted that natural gas production would reach 700 million cubic meter/day by 2012.(10) , and 900 million cubic meter/day by 2015.(11)ahwaz-gas

Furthermore, Iranian media reported in 2012 the discovery of a gas field “as big as the Asaluyeh (South Pars) gas field” in the oil-rich South –Ahwaz (Bushehr) province. Gas processing plants are located at Ahwaz, in Marun, Kangan, Omidiyeh and many other cities in a corridor along the northern Arabian Gulf close to the major gas fields. Asaluyeh city in Ahwaz is the largest natural gas field, has received substantial foreign investment by the Iranian occupation Government.

The total market value of Iran’s natural gas from the Ahwaz land reserves, at a comparative international energy price of $75 per barrel of oil, stands at US$ 4 trillion. (12)

According to 2006 estimates Iran produced about five percent of the world’s crude oil. They produced 4.2 million barrels per day (670,000 m3/d) of liquids, of which 3.8 million were crude oil. Iran plans to invest $100 billion during the next four years in different sections of its oil industry (2009). By the end of 2009, the Iranian oil R/P ratio was 89.4 years which is the world’s highest. By 2009, Iran had 52 active rigs and 1,853 producing oil wells. (13)

At the end of 2009, Ahwaz held 10.3% of the world’s total proven oil reserves, which translates into about 137.6 billion barrels (2.188×1010 m3) of oil.. (14)  Oil is also found in northern Iran and in the offshore waters of the Persian Gulf. Nevertheless, in 2005 Iran spent US$4 billion on gasoline imports, mainly because of contraband and inefficient domestic use that results from subsidies. Iran is one of the largest gasoline consumers in the world ranking second behind the United States in consumption per car.(15)

At that time, according to the Iranian government, Ahwaz land had enough reserves to produce oil for the next 100 years while the reserves of other Middle Eastern countries will be depleted in the next 60 years and most other oil countries within the next 35 years.

In February 2017, the head of exploration at the National Iranian Oil Company (NIOC), Seyyed Saleh Hendi, announced that a dozen new oil fields have been discovered with reserves of around 30 billion barrels.  He also announced the discovery of 128 trillion cubic feet of gas. “New discoveries, which happened over the past four years, show that more gas finds are likely, although any new oil find is not believed to be sizable”  Hendi told reporters in Tehran.“We have to say goodbye to (finding) such big fields as Yadavaran and Azadegan and get used to discovering smaller fields,” he added.

Nonetheless, it is reported that these new finds will provide the country’s needs for oil for another 21 years.However, the regime, instead of using the revenue from the Ahwazi oil and gas industry for economic growth, maintaining the environment, public services, national health, etc, has spent it on  supporting Terrorist Organisations like Al-Qaeda, Hizb Allah, Al –Hothi and Bashar Al Assad. And while the Iranian regime uses the revenue for such nefarious purposes, the Ahwazi people get only repression, unemployment, poverty and disease, brought about by the appalling high degree of  air and water pollution resulting from the byproducts of the industry.

Neglect of the environment has also resulted in the Ahwaz region being  plagued by sandstorms in recent years. In the last few days sandstorms  have  blanketed many of the Ahwaz cities and towns, leading to a number of  power outages in this oil rich province.

A power cut  that hit production of 700,000 barrels of oil was restored within hours, according to a senior official. They were less concerned that the outages caused water treatment facilities to temporarily shut down, cutting supplies to many neighborhoods in major cities such as Ahwaz.

Bijan Alipour, managing director of the National South Oil Company, said,  in a statement, published on the Ministry of Petroleum’s Shana news website.  “As power supply has been reestablished, processing plants have resumed production according to schedule and the reduced hours will be compensated as much as possible.”oil-ahwaz-poverty

But, while the current regime remains in place,, there is no expectation that this revenue will be used to improve the situation for the people living in the area, suffering from respiratory and many other diseases brought on and made worse due to the scandalous environmental and human conditions of Ahwaz.

Resources :

1- Kurtis, Glenn; Eric Hooglund. Iran, a country study (PDF). Washington D.C.: Library of Congress. pp. 160–163. ISBN 978-0-8444-1187-3. Retrieved November 21, 2010.

2-Taken from;  “Iran oil exports top 844mn barrels”. Presstv.com. Retrieved 2010-12-01

 3- How Iran could double its oil output. CNN. Retrieved June 3, 2012

 4-Energy Information Administration: Iran’s entry Retrieved November 21, 20

5- How Iran could double its oil output. CNN. Retrieved June 3, 2012.

6- Kurtis, Glenn; Eric Hooglund. Iran, a country study (PDF). Washington D.C.: Library of Congress. pp. 160–163. ISBN 978-0-8444-1187-3. Retrieved November 21, 2010.  This article incorporates text from this source, which is in the public domain.

7- http://www.nisoc.ir/HomePage.aspx?TabID=4913&Site=nisoc&Lang=en-US

 8-http://www.en.nioc.ir/portal/home/?generaltext/81026/81171/119847/

 9-http://www.nisoc.ir/HomePage.aspx?TabID=4913&Site=nisoc&Lang=en-US

 10- Moj news: Iran to Raise Gas Output Capacity to 700 mln cum in 2012 Retrieved April 5, 2011

11-  PressTV: Iran to up gas production capacity Retrieved January 6, 2011

12- Iran to Cut Oil Subsidies in Energy Reform”. IMF Survey Magazine. International Monetary Fund. September 28, 2010. Retrieved 21 November 2010.

13-http://www.opec.org/opec_web/static_files_project/media/downloads/publications/ ASB2009.pdf)

14- BP Statistical Review of World Energy” (PDF). Archived from the original (PDF) on 2013-08-25. Retrieved 2012-02-05.

15- Green Party of Iran – News”. Iran-e-sabz.org. Retrieved 2012-02-05.

By  Mostafa Hetteh

Note: The views expressed in this article are belong to the author and do not necessarily reflect the editorial policy of Ahwaz Monitor.

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